Cariboo Regional District

Building Communities Together

 

2008 Business Plan

Lac La Hache Water (1880)

 

Mitch J. Minchau, Manager of Environmental Services

 

Working in partnership with communities, large and small, to make the Cariboo Chilcotin a socially, environmentally, and economically desirable region to live, work and play.

 

Department/Function Services

 

The Lac La Hache water function was established in 1981 and now services approximately 180 land parcels. The system is comprised of two wells, two well houses, associated pumps and distribution piping, fire hydrants and a water reservoir. In addition to meeting domestic needs, the system provides an adequate quantity of water to aid community fire protection.

 

The water quantity and quality is tested on a regular basis and adjustments to the system are made as required.  Regular inspection and maintenance to the system components is undertaken to ensure continuous operations.  As well, new connections are provided to residents as requested.

 

Taxation is collected by way of a variable rate user fee.  The Lac La Hache Local Service Establishment Bylaw No. 2885 provides function authority.

 

As Electoral Area “G” is the only stakeholder, and the Local Government Act requires more than one vote, the entire Board is responsible for the governance of this service.

 

Business Plan Goals, Objectives & Strategies

 

2008 Goals

 

There are no new goals for 2008, at this time.  Results of the current well head protection plan due to be completed by December 31, 2007 and staff assessments regarding potential treatment and chlorination will direct future goals for the function.

 

2009 Goals

 

1.         Goal:  Increase user fee.

Rationale:  The water function will not have adequate funds to ensure continued operations unless fees are increased in 2009. The typical residential rate will have to increase from $104 to $144.  The current rate has been in effect since 2000. The new rate would sustain operations until 2014.

Strategy:  Amend the user fee bylaw to increase rates by 38%.  

 

2.         Goal:  Establish a parcel tax.

Rationale:  The Public Sector Accounting Board requires local governments to report and record tangible capital assets and amortize these assets over their useful life.  In order to provide for future replacement of tangible capital assets, the amortized amount will be allocated annually to a capital reserve fund.  This amortization will be an expense to the function budget.

The water system is comprised of PVC piping along with associated metal valves, hydrants, wells and pumps.  The approximate life expectancy for a water system comprised of PVC piping is 100 years.  The majority of system components were constructed in 1981.  Based on a remaining 74 year life expectancy, the cost to replace the system in 2081, accounting for inflation, would be approximately $4.4 million.  In order to ensure that sufficient future funds are available to replace the individual components, an annual capital reserve contribution of $17,000 should occur.  This capital contribution should start in 2009.  Currently no parcel tax is in effect for this function.

Strategy:  Establish a parcel tax of $95.

 

Overall Financial Impact

 

There is no taxation levied for this service.

 

The capital reserves at the end of 2006 were $11,244 and a Municipal Finance Authority surplus payout of $144,506 also exists for a total available capital amount of $155,750. The residential user fee for the water system is $104 per year. There are no capital reserves being accumulated at this time.  The current budget surplus is $35,584 and will be depleted at a rate of approximately $1,400 per year.  A review of future financial needs has been completed so as to address ongoing and future new operations associated with permit requirements. 

 

Significant Issues & Trends

 

As reported under the 2009 goals, the Public Sector Accounting Board now requires local government to report and record tangible capital assets and amortize these assets over their useful life. 

 

Residents along Station House Road have voiced their interest in being included in the Lac La Hache water system.  Residents formed a committee to better determine the level of public interest and the CRD, under Board resolution, administered a letter of petition.  After considering the potential costs, 90% of residents rejected the development of a water system.

 

The requirement to provide chlorination and possible pretreatment cannot be determined until the well head protection plan is completed and the Ministry of Health has made a final assessment on the need to chlorinate ground water systems.  Should chlorination and pretreatment to remove iron and/or manganese be required, the capital cost to do so would be in the order of $10,000 to $15,000 for chlorination and $50,000 to $75,000 for pretreatment. Due to the small size of the water system and the low technical requirements of the anticipated equipment, additional operating costs would not be significant. Funds for these capital improvements could be obtained from existing reserves or from the Community Works Fund.

 

Measuring Previous Years’ Performance

 

No significant goals were established for 2007 and issues from 2006 regarding short and long term plans to address new permit requirements, as well as operational and capital funding requirements for the function, have been addressed and reported in this business plan.

 

The wellhead protection plan is underway, as directed by the Board, utilizing the Community Works Funds.  The consultants, ND Lea and Kala Groundwater, previously anticipated completion of the plan by December 31, 2006.  Completion of the plan has not occurred and is now anticipated by December 31, 2007.